Can Online Video Ads Rescue Newspapers?

This report is music to our years, the good news we've all been waiting for.

According to the New York Times, Online Ads Are Booming, if They’re Attached to a Video

Excerpts:

News Web sites are starting to look a lot less like newspapers and a lot more like television.

CNN.com and ESPN.com are featuring video much more prominently on their home pages, often prompting visitors to press play before they begin to read. Even The Wall Street Journal has moved its video player front and center with a twice-a-day live newscast on WSJ.com... Video is currently the strongest ad format for WSJ.com....

A major reason is commercial. At a time when other categories of advertising dollars are shrinking, video ads are booming. News sites are adding more video inventory to keep pace with the demands of advertisers, and benefiting from the higher cost-per-thousands, or C.P.M.’s, that ads on those videos command.

The attention to video mirrors changes in how consumers are experiencing news. Major events — be it the presidential election or the death of Michael Jackson — bring a surge in video stream viewings by new users, and each time some of them stick around.

Augmenting the increase in video spending is the growing acceptance of pre-roll — the once-derided ads that appear before a video plays.

Some facts and figures:

* Among Web sites operated by newspapers, The New York Times, Gannett and Tribune each reach more than a million viewers a month with video streams.

* Video is now the fastest-growing segment of the Internet advertising market. Digital video amounted to $477 million in revenue in the first half of 2009, up 38 percent from the same time period in 2008.

* Analysts predict video ads will be the “main channel” for major advertisers seeking to increase their online spending.

* News sites account for only a small portion of the 25 billion video streams counted by comScore on an average month. The firm reported almost 500 million video streams in its news and information category in September — still a substantial figure.

* Researchers project 35 to 45 percent growth for news video advertising for each of the next five years, topping out at $5.2 billion in 2014.

As one exec notes: “The Web is fulfilling this promise of being a medium where you can enjoy video as much as you can see it on TV. The difference online is, if you want to do something with it — share it, stick it on a blog, post it on a Facebook page, or mark it and save it — you can do all that. And that was never possible before.”

Clear message for journalism Websites. You want more ad revenue? Produce and publish more video!

Big Ouch: Gannett Axes 1,400 Jobs

According to the Wall Street Journal:

Gannett Co., the largest U.S. newspaper publisher by daily circulation, will cut between 1,000 and 2,000 jobs out of its 41,500-person work force in response to continuing revenue declines, according to a person familiar with the company's thinking.

The cuts will come from the U.S. Community Publishing division, which consists of Gannett's more than 80 local dailies, the person said, and won't affect the company's flagship, USA Today.

AP Business Writer Andrew Vanacore provides a more specific number:

Newspaper publisher Gannett Co. plans to cut 1,400 jobs in the next few weeks, about 3 percent of the work force, as it faces a prolonged slump in advertising revenue.

Tellingly, the most likely place to find that AP story is not at a newspaper Website, but at Yahoo or Google News , neither of which pay for its use, but make money whenever someone views the story on their respective sites. And therein lies the problem.

CJR Does the Math: Kindle Doesn't Add Up

The Columbia Journalism Review did the math and demonstrated that there's no way that Amazon's Kindle DX is going to save the newspaper industry -- corroborating our previous thoughts on the subject.

Then CJR re-did the math the next day, taking into account the previously overlooked fact that a whopping seventy percent of revenues will go to Amazon and also to the wireless service that powers the whole concept ... and found that the results were even more dire than they had calculated. If a reader pays $14/month, the newspaper pockets only $4.20 of that.

CJR also factored in a Bloomberg report about a visionary Knight Ridder experiment conducted in 1992, designed to culminate in its own portable newspaper-reading device intended to boost readership and revenues. After three years, the project fizzled and the 10-person lab was shut down.

A key flaw in the Kindle plan is the absence of any way to display full-color non-text advertising -- a necessary source of revenue. But others are undeterred.

Gannett Co., which stopped home delivery of its Detroit Free Press four days a week, said it will distribute the newspaper on another e-reader being developed by Plastic Logic Ltd. ... Hearst Corp., which owns the Houston Chronicle, also invested in a company developing a reader.

[But] the Kindle just looks like another way for newspapers to turn profitable customers into unprofitable ones.

One-Person Video Crews

One phenomenon of newspaper-generated videojournalism has been the emergence of the "one-man band" syndrome: print reporters and/or still photographers suddenly being forced to master every aspect of documentary filmmaking, including reporting, shooting and editing pieces by themselves. For less pay.

While TV news relied on a small team (reporter, cameraperson, editor, writer) -- each professionally trained and skilled at their respective jobs -- newspapers had no tradition in moving images and, budget-strapped, simply piled on extra chores and demanded extra skills from their already overtaxed staffs.

Well now it's happening in TV news, too.

As the Washington Post reports, WUSA, Channel 9, will become the first station in Washington to replace its crews with one-person "multimedia journalists" who will shoot and edit news stories single-handedly. This story is worthy of your attention, because it underscores a dangerous mentality among media management types, who think this is a smart way to save a buck, and seem hellbent on convincing themselves that this will somehow improve quality.

The change will blur the distinctions between the station's reporters and its camera and production people. Reporters will soon be shooting and editing their own stories, and camera people will be doing the work of reporters, occasionally appearing on the air or on in video clips on Channel 9's Web site.

For decades, TV journalists have worked in teams, with the lines of responsibility regulated by union rules or simple tradition. Stories were covered by a crew consisting of a camera operator and a correspondent (and further back, by a sound or lighting technician); their work was overseen by a producer and their footage assembled into a finished story by an editor.

But technology -- handheld or tripod-mounted cameras, laptop editing programs and the Internet -- have made it possible for one person to handle all those assignments, station managers say.

The change is driven by increasing financial pressure on TV stations, as advertisers disappear from nightly newscasts and audiences scatter to the growing number of channels and Web sites. In fact, separate from its new union agreement, WUSA -- owned by media giant Gannett -- plans an across-the-board cut in reporters' salaries as it increases their responsibilities. Multimedia journalists will earn 30 to 50 percent less than what traditional reporters have been earning, with salaries topping out at around $90,000 annually, according to people at the station.

Channel 9 will switch to the new system early next year, becoming the first station in a major market to revamp its entire newsroom.

Leave it to management to put an absurdly positive spin on this:

"We believe strongly that [this change] will raise both the quality and quantity of the product we're putting out" on TV and on the internet, said Allan Horlick, the president and general manager of WUSA. "The concept of a multimedia journalist, having his own beat, with an area of expertise, and a limitless virtual news desk is something we can get very excited about."

However, the concept gets mixed reviews in other quarters.

Veteran TV journalists say their concern isn't the quantity of news that can be produced but the quality, because not all TV journalists are skilled enough to do a job formerly handled by specialists. "There are some people who will be very good at this, and some not as much," said Bill Lord, WJLA's news director. "If you're forcing everyone to do things against their skill levels and desire, your product suffers."

Lord says stations in Nashville and San Francisco have used multimedia journalists on an experimental basis in recent years but have backed away because of "falling quality" and declining ratings.

Another concern: safety. With complicated, fast-moving news stories such as traffic accidents or civil unrest, people on a news crew watch out for one another, said Barbara Cochran, president of the Radio-Television News Directors Association. "You need to be careful," she said.

The upcoming changes at WUSA have soured veteran reporter Gary Reels, who began working at the station in 1980. "It takes a lot of time to shoot and edit and write and prepare a story, and if you have one person doing all that, something has to give," he said .

The Sky is Falling: Who's Left to Cover It?

This week's media news:

• The Christian Science Monitor is ceasing publication of its weekday paper.


• Time Inc. is cutting 600 jobs.


• Gannett, the nation's largest newspaper publisher, is laying off 3,000 (ten percent of its work force).


• The Los Angeles Times newsroom is slashing yet another 75.


• The Newark Star-Ledger is reducing its editorial staff by 40 percent to prevent closing.


• TV Guide, which Rupert Murdoch unloaded in '99 for $9.2 billion, was sold for one dollar -- one-third the cost of a single issue.

Tragically, print media is in big trouble -- and the companies that own publications were too shortsighted to invest in multimedia production that could have bolstered and monetized their online presence. Consequently, their Websites simply do not have the value of their print equivalents, and as the print product shrinks and disappears, it's questionable as to what will happen with the Websites. There won't be anybody left to provide content for them -- and despite conventional wisdom, that content doesn't create itself. In short, they're doomed. Unless they start getting smart and investing immediately in high-quality multimedia and video journalism.

In Mourning Old Media's Decline , the New York Times' David Carr explains the economics of why, in terms of revenue, a Website can't replace a print product. As you read this, ask yourself if things might have been a lot different if publishers had sufficient vision to build their multimedia capabilities, and produce more online packages of the quality that you see regularly showcased on KobreGuide.com ?

For readers, the drastic diminishment of print raises an obvious question: if more people are reading newspapers and magazines, why should we care whether they are printed on paper? The answer is that paper is not just how news is delivered; it is how it is paid for. More than 90 percent of the newspaper industry’s revenue still derives from the print product, a legacy technology that attracts fewer consumers and advertisers every single day. A single newspaper ad might cost many thousands of dollars while an online ad might only bring in $20 for each 1,000 customers who see it.

The difference between print dollars and digital dimes — or sometimes pennies — is being taken out of the newsrooms that supply both. And while it is indeed tough all over in this economy, consider the consequences.

New Jersey, a petri dish of corruption, will have to make do with 40 percent fewer reporters at The Star-Ledger, one of the few remaining cops on the beat. The Los Angeles Times, which toils under Hollywood’s nose, has one movie reviewer left on staff. And dozens of communities served by Gannett will have fewer reporters and editors overseeing the deeds and misdeeds of local government and businesses.

At the recent American Magazine Conference, one of the speakers worried that if the great brands of journalism — the trusted news sources readers have relied on — were to vanish, then the Web itself would quickly become a “cesspool” of useless information. That kind of hand-wringing is a staple of industry gatherings.

But in this case, it wasn’t an old journalism hack lamenting his industry. It was Eric Schmidt, the chief executive of Google.